Oxigen Services in talks to raise Rs 1,300 crore; plans to hive off online business

The company plans to raise $100-125 million through a lead investor, while two or three smaller investors will put in the rest of the money, said Saxena.Pratik Bhakta&Sangita Mehta | ET Bureau | November 02, 2015, 08:11 IST

The company plans to raise $100-125 million through a lead investor, while two or three smaller investors will put in the rest of the money, said Saxena.MUMBAI: Payments solution provider Oxigen Services plans to hive off its online business that runs Oxigen wallet into a separate company, which will be called Phi Enterprises, and is in talks with investors to raise $200 million (about Rs 1,300 crore) to build the new brand.

Phi Enterprises will operate the online business while Oxigen Services will manage the Noida-based firm’s offline activities such as remittances and act as a business correspondent for banks that do not have a footprint in the hinterland.

The move is aimed at preventing the online business from eating into the profits of the company’s offline model, which works through 200,000 touch points across the country, chairman and managing director Pramod Saxena told ET.

“My offline business has been cashpositive for the last four years. I would not want the online business to eat into that,” said Saxena.

The online model has a longer gestation period, he said, which is why he is looking for investors who would be ready to pump in money right now. “The fresh funding will allow me to build the online brand through online marketing and consumer communication,” he said.The company plans to raise $100-125 million through a lead investor, while two or three smaller investors will put in the rest of the money, said Saxena.

Phi Enterprises will acquire new customers and build the Oxigen brand through online marketing. “There will be a direct connect between the online and the offline companies because the management will be the same,” he said.

The new company will be a mirror image of the original company, with every shareholder of Oxigen having equal stake in Phi Enterprises as well. After having failed to receive payments bank licence, Oxigen Services has embarked on a massive brand-building exercise by appointing Sachin Tendulkar as its brand ambassador.

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